¶ … companies today, especially multinational corporations (MNCs), have acknowledged that their responsibilities and activities are not just restricted to creating shareholder value, but also extend to addressing direct stakeholders' demands (i.e. employees and customers) as well as taking into account the effect their operations have on the environment and the community. Organizations have readily accepted, and many have even supported, the belief that Corporate Social Responsibility (CSR) should be demonstrated by them. The 'triple bottom line' (3BL) represents another more extensive framework that aims at balancing CSR with sustainability. It endeavors to gauge the social, environmental and economic impacts of a firm's activities. 3BL aims at explaining performance of organizations beyond conventional economic variables (profits, shareholder value, returns on investment). It lays emphasis on overall investment results, including performance factors that relate to the environment and people (Zander & Sutton, 2013). The principle behind 3BL is that the ultimate health or success of a firm can and must be assessed using both its traditional financial measures, and its environmental and ethical/social performance. It has certainly been accepted for some time- by individuals related and unrelated to the business sector- that organizations have numerous obligations towards their stakeholders to act responsibly. Also, it is widely believed and stated that companies cannot hope for long-term success if they neglect key stakeholders' interests over and over again. 3BL's apparent novelty results from its advocators' argument that the total fulfillment of responsibilities to staff, consumers, suppliers and the society (these not constituting an exhaustive list of stakeholders), must be measured, computed, inspected, and reported in the same way as companies' financial performance is assessed over recent several decades. This promise is exciting. A more enduring modern management formula states 'if it can't be measured, it can't be managed'. Because CSR and ethical ways of conducting business are vital management and corporate governance functions, organizations must be receptive to developing tools that make a firm's social, environmental and economic standing more transparent to shareholders, executives, as well as to other stakeholders (Norman & MacDonald, 2004). This paper attempts to address the statement "It is not enough for an MNC to be socially responsible; they should be a triple bottom line firm to fulfill ethical obligations."
Corporate Social Responsibility (CSR)
The term corporate social responsibility (CSR) has two connotations. Firstly, it signifies a generic name for company theories that focus on the money-making obligations, as well as that of ethically interacting with the community. Secondly, CSR also denotes a specific comprehension of that profit-making responsibility, while concurrently contributing to broader aspects of societal well-being (Brusseau, 2012). CSR, in this sense, i.e., is a concept addressing how organizations interact with their neighboring environments and the world, at large. It is comprised of four responsibilities:
1. An economic 'money-making' obligation. A necessary condition in economics, this obligation represents the translation of mankind's survival instinct into the corporate world. There are, of course, exceptions. But for most business operations, profits are a must, without which a business cannot survive, and business ethics cannot exist.
2. A legal obligation to abide by regulations and rules.
3. An ethical obligation to do what is right, even if the law doesn't stipulate it.
4. A philanthropic obligation to take part and support societal projects, even if they don't form part of the firm's business operations (Brusseau, 2012).
The Triple Bottom Line (3BL)
The 3BL approach denotes a type of CSR that establishes that organizational leaders present the firm's bottom-line performance results to stakeholders not just in cost-revenue terms, but also with regards to effects of the firm's operations on the environment and on society. This concept has two preconditions. Firstly, all three elements should be distinctly studied, and separate result reports should be made. Secondly, the organization should produce sustainable outcomes in each of the three areas. The sustainability notion is highly specific, and at the juncture of economics and ethics, it denotes maintaining balance in the long-term (Brusseau, 2012).
Economic sustainability: Valuing financial stability in the long-run over short-term volatile profits (irrespective of how high they may be).
Social sustainability: Valuing balance in the lives and lifestyles of people. It demands that corporations, being citizens of a particular community, must keep healthy relationships with community members.
Environmental sustainability: This stems from an understanding that the world's natural resources are scarce.
Together, these sustainability elements steer companies in the direction of actions that align with the idea that they are community citizens, not just money-making units. One fundamental difference between 3BL and CSR is cultural,...
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